Q: Lawsuit against me and LLC in NJ over alleged competition while employed abroad. Impact of non-compete?
I have received a lawsuit against me and my partnership LLC in New Jersey. The lawsuit involves my previous employment with a company registered in New Jersey, while I was physically working in a subsidiary in a foreign country. The accusations are related to damage to business and engaging in a competing business. I signed an employment letter while working abroad and became a partner in another LLC registered in New Jersey, with an overlapping tenure over the past five years. I resigned from my full-time employment in the foreign company five months ago. How might these factors influence the legal proceedings, especially regarding non-compete agreements or other legal obligations?
A: Your question is going to require a consultation with an experienced civil litigation. You can expect to pay a $300.00 consultation (either virtual or in person). The entire collection of relevant documents you received must be reviewed. Pick the best attorney you can find and remember one rule: a good attorney is generally never cheap, and a cheap attorney is generally never good so don't choose based on price. With modern technology, you can be represented by any high-quality attorney in New Jersey irrespective of geography.
H. Scott Aalsberg agrees with this answer
A: A lawyer would need to review the documents before giving you an specific answer, that being said the terms of service here don't allow us anyway to give specific legal advise to your situation. What I will say is if you are in violation of an agreement that you are a party to, the other party can sue you for damages, what they will collect will be based on the contract and/or the amount of damages sustained within the scope and legality of the contract, which acts as a variable that will effect any judgment.
A:
Your situation presents a complex interplay of jurisdictional factors that will significantly impact the enforceability of any non-compete provisions. New Jersey courts typically apply the "most significant relationship" test when determining which jurisdiction's law applies in employment disputes involving foreign elements. The physical location of your work abroad may create jurisdictional hurdles for the plaintiff, potentially limiting the reach of New Jersey law regarding restrictive covenants.
Non-compete agreements face varying levels of scrutiny across different jurisdictions, with New Jersey courts generally requiring them to be reasonable in scope, duration, and geographic limitation to be enforceable. Your five-month resignation period might be relevant as many courts consider the timing between employment termination and competitive activities when assessing potential breaches. The overlapping partnership status with another New Jersey LLC during your employment presents potentially serious complications, as this could be interpreted as a breach of fiduciary duty separate from any contractual non-compete restrictions.
The specific terms of your employment letter will be crucial to review, particularly regarding any choice-of-law provisions, arbitration clauses, or explicit restrictions on outside business interests. You should immediately gather all relevant documentation including your employment agreement, partnership agreement, resignation letter, and any communications regarding your business activities. Seeking immediate representation from counsel experienced in cross-border employment litigation would be advisable given the multi-jurisdictional complexity and potential financial exposure in this matter.
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